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Youkelsone v. Federal Deposit Insurance Corp.

United States District Court, District of Columbia

December 20, 2012

Nadia YOUKELSONE, Plaintiff,
FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of Washington Mutual Bank, Defendant.

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Nadia Youkelsone, Seldon, NY, pro se.

Anne M. Devens, Alesia N. Black, Federal Deposit Insurance Corporation, Arlington, VA, Lori J. Searcy, Searcy Business Litigation & Employment Law, LLC, Alexandria, VA, for Defendant.


ROSEMARY M. COLLYER, District Judge.

Nadia Youkelsone once owned a two-family residence in Brooklyn, New York. After she failed to make mortgage payments, the mortgage holder, Federal National Mortgage Association, initiated foreclosure proceedings in September 2001. Years of litigation followed, with Ms. Youkelsone, an attorney, representing herself pro se. In this particular suit, Ms. Youkelsone complains tat Washington Mutual Bank, which held the mortgage before Fannie Mae and continued to service it after its assignment to Fannie Mae, is liable to her for breach of contract, various torts, abuse of process, and other legal wrongs. The Federal Deposit Insurance Corporation stands in the shoes of Washington Mutual Bank as its Receiver since the Bank's collapse in 2008. FDIC-Receiver moves to dismiss the Second Amended Complaint.

The D.C. Circuit Court of Appeals has clarified that Ms. Youkelsone has standing to sue WaMu. See Youkelsone v. FDIC, 660 F.3d 473 (D.C.Cir.2011). Upon FDIC-Receiver's renewed motion to dismiss on remand, this Court determines that Ms. Youkelsone's claims are barred by the relevant statutes of limitations. The Second Amended Complaint will be dismissed.


Ms. Youkelsone owned a two-family dwelling on East 18th Street, Brooklyn, New York, when this saga began. Second Am. Compl. [Dkt. 40] (Compl.) ¶ 16. Ms. Youkelsone had purchased the property with a Note and Mortgage from GFI Mortgage on March 3, 1997. Id. ¶ 17; see also id., Ex. 1 (Mortgage), id., Ex. 2 (Note). That same day, GFI Mortgage assigned the Note and Mortgage to Fleet Mortgage Corporation. Id. ¶ 18. Fleet serviced and/or owned the Note and Mortgage until Fleet merged into Washington Mutual Home Loans (WaMu), a subsidiary of Washington Mutual, Inc. (WMI). Id. ¶¶ 20-21. Within months, on August 25, 2001, WaMu in turn assigned the Note and Mortgage to Fannie Mae.[1] Id. ¶ 23. Fannie

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Mae recorded its interest in the New York City Registry's office on November 15, 2001, after the relevant events began to unfold. Id. ¶ 26. Apparently no notice of the assignment was sent at that time to Ms. Youkelsone, and WaMu continued to service the Note and Mortgage after the assignment to Fannie Mae, a cause for some confusion. Id. ¶¶ 24, 28-29.

Fannie Mae, taking the position that Ms. Youkelsone was in default on the Note, initiated a foreclosure action in October 2001 in the Supreme Court of the State of New York in Kings County, Case No. 36834/01 (Foreclosure Case). Id. ¶¶ 25-28; Fed. Nat'l Mortg. Ass'n v. Youkelsone, No. 36834/01 (N.Y.Sup.Ct. filed Oct. 4, 2001).[2] Although Fannie Mae filed the Foreclosure Case, Ms. Youkelsone alleges that WaMu " prepared, executed and filed debt verifications" and acted together with Fannie Mae in " wrongful actions ... including but not limited to foreclosure action, bankruptcy proceeding, contract of sale, subsequent actions in satisfaction of mortgage." Compl. ¶¶ 31-32. She complains that Fannie Mae and WaMu " aided and abetted each other in commission of tort[i]ous actions against [her] and in facilitation of the scheme designed to defraud and to misappropriate [her] property and [her] property right." Id. ¶ 34.

Fannie Mae's efforts to foreclose were contested long and loudly by Ms. Youkelsone, beginning immediately in 2001. See Fed. Nat'l Mortg. Ass'n v. Youkelsone ( Foreclosure Case Supreme Court Sanctions Opinion ), No. 36834/01, at *5 (N.Y. Sup.Ct. April 4, 2003) (denying Ms. Youkelsone's motion for sanctions; granting Fannie Mae's motion for sanctions against Ms. Youkelsone), attached as Def. Mem. Supp. Mot. Dismiss (Def. Mem.), Ex. 1 [Dkt. 41-2]. Shortly after Fannie Mae filed the Foreclosure Case, Ms. Youkelsone filed a separate suit against Fleet Mortgage Corporation in the Supreme Court of New York in Kings County (State Court Case). See Youkelsone v. Fleet Mortg. Corp., No. 50145/2001 (N.Y. Sup.Ct. filed Dec. 24, 2001). The Supreme Court denied Ms. Youkelsone's motion to dismiss the complaint in the Foreclosure Case, and the Appellate Division affirmed. See Fed. Nat'l Mortg. Ass'n v. Youkelsone ( Foreclosure Case Appellate Division Opinion ), 303 A.D.2d 546, 755 N.Y.S.2d 730 (2003). The Appellate Division held that Fannie Mae had standing to bring the Foreclosure Case because the assignment from WaMu was valid and that Ms. Youkelsone's unspecified " remaining contentions" were meritless. Id. at 730.

Ms. Youkelsone contends that her equitable interest in the property during the Foreclosure Case was over $600,000, which " far exceeded" the Note, worth approximately $150,000 in principal. Compl. ¶¶ 36, 79. Throughout the foreclosure proceedings, Ms. Youkelsone attempted to sell her property privately, but WaMu is alleged to have " continuously rejected" and/or " ignored" her pleas. Id. ¶¶ 37-38. She alleges that she was forced to " file a Chapter 13 bankruptcy" as a direct result of " the defendant's wrongdoings." Id. ¶ 39. The records of the Bankruptcy Court for the Eastern District of New York reveal that Ms. Youkelsone filed a voluntary Chapter 13 petition on June 19, 2003, and, on WaMu's motion, the Bankruptcy Court dismissed the case pursuant to 11 U.S.C. § 1307(c) on November 24, 2003. See In re Nadia Youkelsone, Bankr.No. 1-03-18019 (Bankr.E.D.N.Y. filed June 19, 2003). Ms. Youkelsone complains that WaMu falsely informed the bankruptcy court that she was delinquent on her Note, failed to apply her payments to the

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Note, and, " together with [Fannie Mae] engaged in[ ] the scheme to misappropriate the equity interest in [her] dwelling, and to deprive [her] of the benefit of the Bankruptcy Code" by misrepresentations to that court. Compl. ¶¶ 40-50. " As a result of the Defendant's continuous fraudulent scheme, [Ms. Youkelsone's] bankruptcy plan was not approved and [the] bankruptcy petition was dismissed in December, 2003." Id. ¶ 53.

In August 2002, the New York Supreme Court dismissed the State Court Case, and the Appellate Division affirmed. Youkelsone v. Fed. Nat'l Mortg. Ass'n ( State Court Case Appellate Division Opinion ), 309 A.D.2d 655, 765 N.Y.S.2d 792, 792 (2003) (" To the extent plaintiff's claims are dependent upon the alleged invalidity of the assignment, an allegation conclusively rejected ( see [ Foreclosure Case Appellate Division Opinion ] ), or were otherwise asserted and necessarily decided in consequence of plaintiff's motion practice in the Kings County foreclosure action, they are barred by the principles of collateral estoppel. Moreover, the complaint, even when viewed in the light most favorable to plaintiff, states no cognizable claim for relief." (citations omitted)).

Judgment was entered in the Foreclosure Case in April 2003, and the sum of $177,609.44, with interest, was ordered due to Fannie Mae. Fed. Nat'l Mortg. Ass'n v. Youkelsone ( Foreclosure Case Judgment of Foreclosure ), No. 36834/01, at *4 (N.Y.Sup.Ct. Apr. 30, 2003), attached as Def. Mem. Ex. 2 [Dkt. 41-3]. The Supreme Court ordered that Ms. Youkelsone's property be sold at public auction. Id. at *2. Ms. Youkelsone was also sanctioned in the amount of $6,000 for her obstreperous conduct throughout the Foreclosure Case. Foreclosure Case Supreme Court Sanctions Opinion at *5-7.

Early in 2004, Ms. Youkelsone continuing trying to sell her property privately. She alleges that she entered into a workout plan " with the Defendant [WaMu]" on February 5, 2004, and provided all requested documentation but " Defendant [WaMu] did not respond and made no determination of [Ms. Youkelsone's] application to cure the default." Compl. ¶¶ 55-57.[3] Despite her efforts, " Defendant [WaMu]" scheduled a foreclosure sale on February 26, 2004. Id. ¶ 58. Ms. Youkelsone delivered " a copy of a written contract to Defendant [WaMu]" to obtain permission to sell the property herself on February 19, 2004, and " Defendant [WaMu] formally consented and gave permission ... and stayed the foreclosure sale." Id. ¶¶ 62-63. When, however, Ms. Youkelsone was ready to move to settlement and requested a payoff statement on June 21, 2004, " Defendant [WaMu] failed to respond." Id. ¶ 67. Despite " at least five" efforts, Ms. Youkelsone was unable to obtain the documentation needed to close on the private sale; instead, " the defendants" filed an application in October 2004 to conduct an auction on November 18, 2004. Id. ¶¶ 73-74. Ms. Youkelsone alleges that " [i]n its application for foreclosure dated October 22, 2004 the defendant [WaMu] demanded the sum in the amount of $177,609.44 which included excessive interest rates, improper legal fees and expenses not incurred by the defendant." Id. ¶ 75.

The Court pauses to note the confusion between WaMu and Fannie Mae present throughout the Complaint in this case, as well as the Complaint in Ms. Youkelsone's ...

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